Tennessee is likely to reject hundreds of millions of dollars President Joe Biden is offering states to expand Medicaid as part of his $1.3 trillion COVID-19 relief package, even though hundreds of thousands of people remain without healthcare coverage.

Democrats have been urging the state’s top Republican leaders for years to accept the federal government’s funds to increase TennCare coverage to 300,000-plus uninsured and underinsured residents caught in a gap between the state’s Medicaid plan and the Affordable Care Act. Some estimates put the figure at 600,000.

Tennessee, one of 12 states holding out on Medicaid expansion since the Affordable Care Act passed, could receive $1.7 billion to provide insurance for the working poor and more money to cover the people already on TennCare, according to an analysis by the Center on Budget and Policy Priorities, a left-leaning organization.

But even if the Biden Administration sweetens the pot with COVID-19 relief money, Republicans in Tennessee are expected to turn it down, especially after receiving approval for a Medicaid modified block grant or “shared savings program.”

Tennessee’s Republican lawmakers are expected to turn down about $1.7 billion to provide insurance for the working poor. Even during the previous Trump Administration, the federal government would have paid Tennessee about $1.4 billion to expand TennCare. 

Lt. Gov. Randy McNally and other top Republicans, including Gov. Bill Lee, adamantly oppose widening the net for TennCare.

“Lt. Gov. McNally’s opposition to Medicaid expansion has always been rooted in the fact that money from the federal government is not ‘free. These are taxpayer funds like any other,’” spokesman Adam Kleinheider said in a Wednesday statement. “Unlike Medicaid expansion, the block grant waiver is a sustainable model. It gives Tennessee unprecedented control over Medicaid dollars in order to find efficiencies and improve health outcomes for Tennesseans. The block grant waiver is far superior to any Medicaid expansion scheme. The promise of additional short-term money does not change that calculus.”

The federal government would pick up 90% of the expenses, and the states would pay 10%, while the extra money would end after two years, according to the article. Even during the previous Trump Administration, the federal government would have paid Tennessee about $1.4 billion to expand.

Instead of encouraging the state to expand Medicaid, the outgoing director of Centers for Medicare and Medicaid Service reached an agreement with TennCare for the modified block grant less than two weeks before Trump left office. The plan will give Tennessee a lump sum of money for TennCare, and the state will be able to tap into savings it finds through efficiencies to provide more services to enrollees, possibly up to $1 billion annually.

Gov. Bill Lee, who has said repeatedly he believes the Affordable Care Act is “fundamentally flawed,” hailed the Medicaid block grant in his State of the State, committing to using “shared savings” to take action such as shortening the waiting list for people with intellectual and developmental disabilities.

He is not pushing for Medicaid expansion, leaving hundreds of thousands of Tennesseans without insurance coverage, and doubled down on his support for the modified block grant, saying, “if partisan attacks that call for this block grant to be rescinded prevail, the state will not get these shared savings dollars that we plan to use to improve healthcare for vulnerable Tennesseans.”

Democrats criticized the governor’s partisanship during what is normally a moderate address.

House Minority Leader Karen Camper, a Memphis Democrat, is among those who believe the state should tap into Biden’s coverage plan and put more people on TennCare rolls.

Tennessee House Minority Leader Rep. Karen Camper, D-Memphis (Photo: Tennessee General Assembly)
Tennessee House Minority Leader Rep. Karen Camper, D-Memphis (Photo: Tennessee General Assembly)

“The Biden Administration has been in office less than a month, and they are already tackling the problems we have as a nation with healthcare coverage. I applaud them for their speed and tenacity on this issue,” Camper said in a statement to Tennessee Lookout.

Camper points out her party has been fighting for years to ensure the working poor can get access to healthcare coverage, arguing all along that Medicaid expansion is the most “cost-effective” way.

“Although I can only speak as the leader of the House Democrats, when one of our citizens is in need of healthcare, it is not a partisan issue. Our individual health affects our collective health. If we can bring down more funding for our people, I am totally supportive of those efforts,” Camper said. “After nearly a year into this pandemic, it is clear that leveraging federal dollars – dollars that our citizens pay into – is the correct way to solidify our healthcare infrastructure in Tennessee.”

Tennessee Justice Center, an advocacy group representing the efforts of the state’s poorest residents to obtain healthcare insurance, contends the needs for more federal funding to help cover Tennesseans has never been greater amid the COVID-19 pandemic, the recession, rural health crisis and opioid epidemic.

“Surely our state leaders will rise above politics and take advantage of any federal resources that Congress makes available for the benefit of Tennessee families,” said Michele Johnson, executive director of the Tennessee Justice Center.

Michele Johnson, Executive Director of the Tennessee Justice Center
Michele Johnson, Executive Director of the Tennessee Justice Center (Photo: Tennessee Justice Center)

But Senate Majority Leader Jack Johnson said Wednesday he would expect “some real hesitation” toward Medicaid expansion. He wasn’t aware Biden put those incentives in the COVID-19 relief legislation, saying instead he is “excited” about the Medicaid “shared savings” agreement for TennCare.

“The governor has expressed his opposition to expanding Medicaid, both speakers have. We’ll have to just see what’s in the package. But I’m not optimistic we would take that under serious consideration,” Johnson said.

If the Biden Administration were to rescind the TennCare agreement, the state would have to negotiate a new waiver since its current plan is set to expire June 30. Johnson raised doubts about whether the state would consider Medicaid expansion even if the block grant is turned back.

“We want more flexibility to be able to take care of our folks that are on TennCare, and a blanket Medicaid expansion would result in less flexibility and more decisions being made by bureaucrats in Washington,” he said.

Two Republican legislators, Sen. Richard Briggs of Knoxville and Rep. Sam Whitson of Franklin, have filed legislation they could use to initiate state insurance coverage for those caught between TennCare and expensive private health insurance plans, targeting the working poor, those who are at 138% of the poverty level. They are working to gain support for such a move before introducing it in legislative committees.

Rep. Sam Whitson, R-Franklin (Photo: Tennessee General Assembly)
Rep. Sam Whitson, R-Franklin (Photo: Tennessee General Assembly)

Whitson said he is searching for a “conservative approach” that would use available federal funds but wouldn’t hurt the state financially. It would give people the opportunity to obtain insurance coverage by paying part of the premiums and copayments. 

Republicans turned down former Republican Gov. Bill Haslam’s Insure Tennessee proposal six years ago because of its connection to Obamacare, contending it could put a financial strain on the state. They consistently point out former Democratic Gov. Phil Bredesen had to remove 200,000 people from TennCare rolls in 2008 because the state was losing too much money.